Archive for the 'Mortgage Reviews' Category
Mortgage Week in Review
December 1st, 2009 categories: Mortgage Reviews
A combination of factors helped mortgage rates improve yet again during the short Thanksgiving week. Strong demand for the Treasury auctions, low inflation, and a fragile economy were all positive for mortgage markets. As a result, mortgage rates dropped to the lowest levels since January.
The consensus economic outlook is for a gradual recovery with low inflation, and the economic data released during the week was consistent with this view. Economic growth during the third quarter of the year was revised lower, but both the Fed and private economists raised their forecasts for future growth. This week’s economic reports indicated that some sectors of the economy are improving, such as the housing market (see below), while others reflected weakness. Wednesday’s data on Core PCE prices continued to show little inflationary pressure, which allows the Fed to keep rates low to assist the economic recovery.
This week’s home sales data far exceeded expectations across the board. October Existing Home Sales jumped 10% from September. Inventories of unsold existing homes dropped to a 7.0-month supply, the lowest level since February 2007. October New Home Sales rose 6%, and inventories of new homes declined to the lowest level in decades. Extremely low mortgage rates, high affordability levels, and the first-time homebuyer tax credit boosted sales in October.
Copyright @ 2009 MBSQuoteline
Brought to you by our Asheville Beverly-Hanks Mortgage Professional – Cameron Lewis
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Mortgage week in Review
July 23rd, 2009 categories: Mortgage Reviews
On Wednesday, the Fed released its minutes from the June 24 FOMC meeting, and most of the news was negative for mortgage rates. The minutes revealed an upward revision to the Fed’s forecast for economic growth and inflation in 2009 and 2010. In addition, Fed officials expressed a strong reluctance to increase any further the program to purchase mortgage-backed securities (MBS). Mortgage rates are largely determined by MBS prices. When the Fed initially announced its MBS purchase program in November, morgage rates immediately dropped, and they dropped again significantly when the Fed announced an increase in the program in March. The Fed has a substantial involvement in MBS markets, and any change in this program would have a major impact on mortgage rates.
The housing sector date released during the week showed improvement. June Housing Starts rose 4% to the highest level in seven months. Building Permits, a leading indicator, jumped 9%. The National Association of Home Builders (NAHB) sentiment index increased to the highest level since September 2008. According to the NAHB, the first-time homebuyer tax credit, low mortgage rates, and “attractive” home prices are helping home sales.
MBSQuoteline 2009
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Mortgage Week in Review
January 19th, 2009 categories: Mortgage Reviews
Despite weak economic data and sizable Fed purchases of mortgage-backed securities (MBS), mortgage rates actually rose a little during the week. After falling by more than 1.0% since late November, mortgage rates have resisted any move lower over the last couple of weeks, even with extremely bond-friendly economic news. Still, mortgage rates remain near the lowest levels seen since the 1950s.
The tame inflation reports and weak economic growth data released during the week should have been favorable for mortgage markets. The December Consumer Price Index (CPA) declined -0.7% from November, mostly due to lower energy prices. The core CPI rate, which excluded food and energy, rose a scant 1.8% from one The core CPI rate, which excludes food and energy, rose a scant 1.8% from one year ago. The December Producer Price Index (PPI) report contained similar results, and inflation concernas are low right now. Meanwhile, the economic growth indicators were much weaker than expected. Both Industrial Production and Retail Sales dropped signficantly in December. In 2008, Retail Sales showed their first annual decline since the data began being tracked. Until the economy show solid signs of improvement, we should see little inflationary pressure on mortgage rates.
This week will be an extremely light week for economic data. Only Housing Starts and Jobless Claims appear on the economic calendar, both on Thursday. The Inauguration of Tuesday may have an impact. Mortgage market were closed today in observance of Martin Luther King Day.
Copyright @ 2009 MBSQuoteline
Cameron Lewis, Beverly-Hanks Mortgage
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Mortgage Week in Review
October 27th, 2008 categories: Mortgage Reviews, Real Estate News
While the headlines were focused on the poor performance of the stock market, mortgage rates improved moderately during a volatile week. Mortgages rates were helped by a couple of factors. Seeking to reduce risk, investors sold stocks and moved the funds into relatively safer Treasury bonds and government guaranteed mortgage backed securities. In addition, slower economic growth and lower energy prices reduced expectations for future inflation. More good news for the housing market came from the September Existing Homes Sales report, which rose 5.5% from August to the highest rate since August 2007.
Another important development was a decline in Libor rates during the week. Libor rates are viewed as a primary indicator of credit market conditions. They are also an important benchmark for setting the rates on many consumer loans, including adjustable-rate mortgages. Libor rates shot higher during the credit crisis when financial institutions became reluctant to lend money to each other. The broad series of recent government actions brought Libor rates down closer to more normal levels.
The biggest event this week will be Wednesday’s Fed meeting. Investors have priced in a half-point rate cut, and they are waiting to see if the Fed will take any other actions to boost the economy. The most important economic data will be Thursday’s Gross Domestic Product (GDP) report. GDP is the broadest measure of economic activity. In addition, New Home Sales will come out today.Â
Brought to you by:Â Cameron Lewis, Beverly-Hanks Mortgage, Xinnix 2008 & MBSQuoteline
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Mortgage Week in Review
October 13th, 2008 categories: Mortgage Reviews
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 This week the stock market fell to the lowest level since 2003. Normally mortgage markets improve during a stock market decline, since Fannie Mae, Freddie Mac, and Ginnie Mae mortgage backed securities (the vehicles through which most mortgages made today are sold) are considered a relatively safe haven. This week, however, the prices paid for these securities moved lower as well. One reason is that some investment funds have been forced to reduce their leverage and sell nearly every asset class in their portfolios. Another factor is investor concern that the supply of debt will increase significantly as the government funds its rescue actions. Mortgage rates ended the week moderately higher. Investors viewed the $700 billion rescue plan passed last week as a necessary first step, but not an immediate solution to the credit crisis. Governments around the world took a variety of additional steps during the week to support the banking system. A historic coordinated interest rate cut from many central banks took place on Wednesday. The Federal Reserve lowered the Fed Funds rate by one half point to 1.50%, citing reduced inflationary pressures due to an economic slowdown and falling energy prices. The Fed Funds rate heavily influences short-term interest rates, but its impact on long-term mortgage rates varies based on inflation expectations. In this case, the Fed rate cut most likely helped move mortgage rates a little lower, but the factors described above had more influence.The decline in home prices was a major cause of the credit crisis, and stabilization in the housing market will be important to resolve the problems. Little noticed this week, August Pending Home Sales jumped 7% from July, far above the consensus for a small decline. They were 9% higher than one year ago and were at the highest level since June 2007. Pending Home Sales are a leading indicator for the housing market, meaning that the next Existing and New Home Sales reports may show increases. Investors will be closely watching future housing market data to see if the trend continues.
The Economic Calendar will be full next week. The Consumer Price Index (CPI) inflation report will come out on Thursday. CPI looks at the price change for those finished goods which are sold to consumers. The Producer Price Index (PPI) will be released on Wednesday. PPI focuses on the increase in prices of “intermediate” goods used by companies to produce finished products. Retail Sales is also scheduled for Wednesday. Industrial Production, an important indicator of economic activity, will be released on Thursday. Housing Starts will come out on Friday. Consumer Sentiment, the Philadelphia Fed index, and the Fed’s Beige Book will round out a busy week. Investors will also be watching for additional government actions to ease credit markets. Mortgage markets will be closed on Monday in observance of Columbus Day.
Brought to you by:Â Cameron Lewis, Beverly-Hanks Mortgage, Asheville, N.C. 828-258-1945 Office, 877-293-5946 Toll Free, clewis@beverly-hanks.com
Courtesy: MBS Quoteline & Xinnix
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Mortgage Week In Review
August 11th, 2008 categories: Mortgage Reviews
Mortgage Week In Review
 The big news this week was Tuesday’s Fed meeting. As expected, the Fed held the Fed Funds rate at 2.0%, but investors were concerned with the tone of the accompanying statement. The Fed’s challenge is to balance the risk of slower economic growth with the threat of higher inflation. Overall, the statement indicated that the Fed is more concerned with stabilizing the financial system than with fighting inflation. This, combined with Monday’s higher than expected reading on core PCE inflation, led to a small increase in mortgage rates during the week.The European Central Bank (ECB) also held a policy meeting this week, and they, too, made no change in interest rates. ECB President Trichet’s comments were similar to Bernanke’s, with warnings about the risks of both slower economic growth and higher inflation in Europe. The economic performance of other countries is important for US mortgage markets, since foreign investors purchase a large quantity of US bonds. For example, foreign investors accounted for 43% of the 30-yr issue and 34% of the 10-yr issue in this week’s Treasury auctions.
In the housing sector, the June Pending Home Sales index rose 5% from May. Pending Home Sales are a leading indicator of future housing market activity, so the next Existing and New Home Sales reports may show increases. In addition, the chief economist of the National Association of Realtors (NAR) expects the recently passed Housing Bill to stimulate the housing market later in the year.
Next week, the Trade Balance will come out on Tuesday. Retail Sales is scheduled for Wednesday. Consumers account for about 70% of economic activity, and this report is a major indicator of spending levels by consumers. The Consumer Price Index (CPI) inflation data will be released on Thursday. CPI looks at the price change for those finished goods which are sold to consumers. Industrial Production, an important indicator of economic activity will come out on Friday. Consumer Sentiment and the Empire State index will round out the schedule.
 Have a great week!
Courtesy of Xinnix and MBS Quoteline
Copyright @ 2008 MBSQuoteline
Cameron M Lewis
Beverly-Hanks Mortgage Services
Residential & Commercial Financing
828-258-1945 Office
877-293-5946 Toll Free
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Mortgage Week In Review
July 28th, 2008 categories: Mortgage Reviews
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 Happy Monday to everyone! Once a week my favorite mortgage man here at Beverly-Hanks, Cameron Lewis, puts out an excellent, to-the-point review of where the mortgage markets are going, or what’s happening in the financial markets that affects mortgages. I’m happy to share these with you on a weekly basis and you will find them most likely on Mondays or Wednesdays. If you have specific questions for Cameron, I will be including all of his contact information at the end of this article.
 Mortgage Week In Review  A comprehensive Housing Bill was agreed upon by the House, the Senate, and the President this week, and it was successful in increasing confidence in the guarantees provided by Fannie Mae and Freddie Mac. As a result, mortgage rates ended the week modestly lower. Formal passage of the Housing Bill is considered a sure thing. One primary feature is that it authorizes the Treasury to provide credit to and buy shares in Fannie and Freddie, if needed. According to industry trade publications, Fannie and Freddie, along with the FHA, accounted for 90% of US home mortgages originated in the second quarter of 2008, up from just 49% one year earlier. Keeping the two firms healthy is vital for the US housing market.
Besides providing support for Fannie and Freddie, the Housing Bill will also help the housing market in other ways. One program will allow the FHA to insure up to $300 billion in new loans targeted at troubled homeowners. Another program adds tax credits for first-time homebuyers, which in essence will be a 15-year interest free loan for up to $7,500. In addition, the bill provides funds for more low income housing and grants to be made for local community redevelopment. A wide range of smaller programs are included as well.
The economic news in the housing sector was mixed. June Existing Home Sales fell slightly, and inventory levels of unsold homes increased. In contrast, New Home Sales were significantly higher than expected in June, and the May figures were revised higher as well. High inventory levels will probably need to come down to achieve a meaningful recovery in the housing market, but the chief economist of the National Association of Realtors (NAR) believes that the Housing Bill will play a major role in helping the housing market to rebound. In particular, he expects the first-time homebuyer tax credit to boost future home sales.
Friday will be the big day next week. The important Employment report will come out that day. As usual, this data on the number of new jobs created, the Unemployment Rate, and wage inflation will be the most highly anticipated economic data of the month, since the health of the labor market is perhaps the single biggest factor in the performance of the economy. Early estimates are for a loss of 70K jobs in July.
The first reading of second quarter 2008 Gross Domestic Product (GDP) will be released on Thursday. GDP is the broadest measure of economic activity. The two national manufacturing indexes, the ISM and the Chicago PMI, will come out on Thursday and Friday. Consumer Confidence and Construction Spending will round out the schedule.
Cameron M Lewis
Beverly-Hanks Mortgage Services
Residential & Commercial Financing
828-258-1945 Office
828-231-4909 Mobile
828-254-7202 Fax
877-293-5946 Toll Free
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